A pool of volunteers made up of seven or more people is known as a public limited business. Except for its members, which must number at least seven to form a public limited corporation, it adheres to different legal requirements. That being said, there is no upper limit to the maximum bandwidth. A public limited company’s share transferability is comparatively easier than that of a private limited company, and member permission is not required. Its continued existence is independent of its members’ insolvency or passing because it is an autonomous entity. Whatever the state of its members, it nonetheless accomplishes its goals. These businesses can raise money from the general population. The public limited corporation may be listed on the stock exchange, or it may not be listed at all.
What is a Public Limited Company?
The company laws govern the incorporation and operations of companies in India. This covers many forms as well, such as Section 8 Companies, Unlimited Companies, Private Limited Companies, and Public Limited Companies.
In India, a Public Limited Company is among the many favored business structure types. You must have an understanding of the significance of the terms “Public” and “Limited” in order to comprehend its meaning. These two phrases refer to two fundamental characteristics of public limited businesses. The word “limited” denotes that this kind of business structure provides its owners limited liability, even while the word “public” suggests that it can freely and publicly sell its shares without any limits. Keep in mind that a Public Limited Company may have as many shareholders as it wants, including members of the general public, with no upper limit.
The SEBI and the Ministry of Corporate Affairs oversee Public Limited Companies. These regulatory bodies have strict restrictions against it, and it has to inform the shareholders regularly about its financial situation. A public limited corporation can own properties and assets in its name as an entity that has been lawfully incorporated and has a unique legal personality.
Features of Public Limited Company as per the Company Laws
Some of the key features of public limited companies are:
Number of Shareholders
A Public Limited Company needs to be formed with a minimum of 7 shareholders. Nonetheless, there is no upper limit on the number of shareholders that a Public Limited Company may have set down by the Companies Act or any other applicable statute.
Divide between Ownership and Management
In a Public Limited Company, the owner or shareholder is not involved in the management of the company at all, in contrast to businesses such as Sole proprietorships and partnership firms are those in which the owner is solely accountable for the management of the business. The owners select the company’s directors, who together make up the Board of Directors, for this reason. Every significant managerial choice made by a corporation is decided upon in Board of Directors meetings.
Board of Directors
The Companies Act of 2013 mandates that a Public Limited Company have a minimum of three directors to oversee its management. But this figure can be increased to a maximum of 15.
Company as a Separate Legal Entity
Following the guidelines outlined in the Companies Act of 2013, a Public Limited Company must register or incorporate with the Registrar of Companies. The firm acquires a legal identity of its own upon incorporation, which is separate and apart from the identities of its owners or shareholders.
Limited Responsibility for Shareholders
In a constrained corporation, the proprietors’ liability is restrained to the amount of capital they’ve subscribed to. That is the significance of the phrase “constrained.” The shareholders shall no longer be required to pay more than the value of the shares they own so that it will settle any duties incurred within the call of the firm.
Share Transferability
All different indexed agencies in this platform are able to purchase shares from Public limited groups which can be listed on stock alternate platforms. further to listed companies on such systems, listed people may additionally purchase such stocks.
The Company’s Prospectus
Public constrained agencies are required to launch a prospectus that includes all applicable data. Understand that simplest publicly traded agencies are required to conform with this requirement, as they cope with the general public and must offer greater records than some other type of business.
Perpetual Existence
A Public restricted business enterprise may additionally continue to exist after its shareholders pass away. A Public restricted business enterprise’s shares are without difficulty swapped or transferred to a new shareholder to take the region of the deceased shareholder upon the death or everlasting departure of any shareholder.
Documents Required for Public Limited Company Registration
Some of the key documents required for the registration of public companies are:
- PAN Card as well as Adhar Card of the promoters
- Passport Size recent Photograph of the promoters
- Address Proof is also required of the promoters
- Proof of Address which must be registered is needed
- No Objection Certificate commonly known as NOC from the Premises owner
- Memorandum of Association
- Articles of Association
- Director’s Consent (DIR-2)
- Digital Signature of authorized director
- DIN of all Directors
Registration Procedure of Public Limited Companies in India
Given below is the step by step process of registration of public companies in India:
Step 1: Obtain Digital Signature Certificates (DSC)
Gain digital Signature certificate (DSC) for each proposed director and subscriber to the articles of corporation and memorandum earlier than beginning the registration procedure. To publish the programs online via the Ministry of company Affairs (MCA) portal, DSC is needed.
Step 2: Apply for Director Identification Number i.e DIN
A Director identification variety (DIN) is required for each candidate for directorship. The SPICe form, which also streamlines the utility method, can be used to apply for this. As a part of the DIN application, you ought to submit documentation of your cope with and identification.
Step 3: Check Company Name Availability
Take a look at whether the name you pick out in your commercial enterprise is available by using the MCA online portal. It is vital to verify that the name isn’t always already in use or violates any registered emblems. This is an essential segment as it defines your enterprise’s own identification.
Step 4: File SPICe+ Form
Post the SPICe+ form as soon as the name is popular. This enormous record is intended to address each prison detail worried about incorporating a commercial enterprise. The Memorandum of association (MOA) as well as Articles of association (AOA), which encompass the organization’s charter and management pointers, should be submitted with this shape.
Step 5: Certificate of Incorporation
The utility may be reviewed through the Registrar of businesses (ROC) following the receipt of the SPICe+ shape and required documentation. The ROC issues a certificate of Incorporation following a success verification. This certificate, which is a criminal file, certifies the enterprise’s formation and includes its company identity range (CIN) and establishment date.
Step 6: Apply for PAN and TAN
Applying for the employer’s Tax Deduction and series Account wide variety (TAN) and everlasting Account variety (PAN) comes after receiving the incorporation certificate. These are important for all transactions and compliances bearing on taxes.
Step 7: Open a Company Bank Account
Finally, open a financial institution account beneath the enterprise’s name. To install the bank account, you may need the certificates of Incorporation, MOA, AOA, PAN, and other pertinent files. all of the organization’s economic transactions will be treated by means of this account.
You might require extra allowances or registrations, inclusive of a GST registration, import/export code, or industry-unique licenses, relying on the sort of enterprise and the enterprise it really works in.
Conclusion
For companies with lofty goals, the complicated procedure of registering as a public limited company, as outlined by the Companies Act of 2013, presents a crucial trip. This guide examines the distinctive characteristics of Public Limited Companies, including their eternal existence, limited liability, and ability to raise unlimited funds from the public. It is intended to act as a guide for entrepreneurs who are navigating the vast terrain of establishing a Public Limited Company. By following the methodical process described below, we enable visionaries to bring their dreams to life and strengthen the legal basis of their Public Limited Companies.
FAQs
- What is a Public Limited Company?
An agency fashioned in accordance with the corporations Act of 2013 that grants its owners and shareholders confined legal responsibility is referred to as a public confined enterprise. The capability to trade shares on open venues, consisting of inventory exchanges, and lead them to be had for public sale, is what units it apart.
- What are the features of Public Limited Companies?
Public limited companies have the following features:
- Mandatory Incorporation
- Shareholders have limited liability and a distinct legal identity.
- Stock trading remains open to the public.
- What are the minimum prerequisites for registering a public limited company?
To check in a Public confined organization, you must have at least 7 shareholders, three directors, a unique and legitimate call, a registered workplace in India and ok Capital.
- Is Startupfino helps in the registration of Public companies?
Yes, startupfino helps in the registration of Public companies in India.
- Is it mandatory to register such public companies?
Yes, in order to work as a public company in the market it is mandatory to register under the MCA as a Public company.
